Financial Planner Mike Repak discusses the evolution of family conversations on the important topic of college planning.

Your baby has arrived - College Savings time

One of the most difficult conversations that families have is over the subject of college planning. Open and honest dialog with your child and the entire family is the best way to set goals early, so you can meet expectations later.

When to have the conversation with your family

At Birth: Establish Goals and Start Saving

The conversation about saving for college should begin as early as possible. The earlier you start saving, the more time compounding of your investment returns can work for you. All family members who may be involved in funding college costs should come together for a conversation to discuss savings options, contribution rates, and available assets (like gifts from grandparents and relatives) that may be used to fund college.

Our advice: Once you have an idea about the contributions that will be made, speak to an expert on the various types of savings plans, like the 529 and others that may be the most beneficial for your unique situation.

Continuing the conversation with your child

In Middle School: Setting Expectations

Once a child has reached middle school, it’s a good time to begin to set expectations about the type of school you would like to see them attend. It might seem premature, but the earlier you have an open and honest discussion about the cost, and the family’s ability to pay for college, the more time your child will have to set realistic goals when college admission time comes.

Our advice: At this point, you should have a college savings plan in place and be checking in with your advisor on its progress periodically to make sure your goals are on track.

In High School: Choosing a College

This is a crucial time to reinforce with your child the impact attending college can have on their future. There is no debating that attending college pays off. It’s also the time to provide your child with detailed information about the cost of college. Help your child gather information on tuition, books, room & board, lab fees, and other costs for three or four colleges they would like to attend.

Include variables that could increase or reduce costs such as:

  • Type of school: School size, private, state school, community college
  • Ways to attend: Residential, commuter, online

Our advice: Bring your child to the next meeting with your advisor so they can get a lesson in financial planning, expenses, and how to budget properly.

Getting Help: Talk to your advisor

At the end of the day, choosing a college is a very personal decision fueled by your child’s hopes and dreams, but paying for college can have a major impact on a family’s finances. Discussing your unique situation with an expert can help you navigate college planning with ease by providing you with:

  • A comprehensive analysis of college funding options

An overall review of your retirement plans to make sure paying for college doesn’t impede your goals

When the time comes, talk to our team to help you manage your various college savings plans and investments. Whether you need funds from your retirement or investment accounts, distributions from 529, UGMA/UTMA, or other type of investment account, your advisor will be there to guide you during the process. We can also give you information on how to apply for student loans, financial aid, insurance considerations, and more.

Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

About the author

Michael Repak

Vice President & Senior Estate Planner

Read more from Michael Repak

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